Supplement 3/31/05
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S UPPLEMENTAL I NFORMATION – M ARCH 31, 2005 PAGE NO. TABLE OF CONTENTS 3 Corporate Profile 4 Contact Information 5 Important Notes 6 Corporate Structure Chart 7 Condensed Consolidated and Combined Balance Sheets 8 Consolidated and Combined Statements of Operations For the Three Months Ended March 31 9 Funds From Operations and Other Financial Information For the Three Months Ended March 31 10 Market Capitalization 11 Net Operating Income 12 Summary of Outstanding Debt 13 Schedule of Outstanding Debt 16 Joint Venture Summary 17 Condensed Combined Balance Sheets of Unconsolidated Properties 18 Condensed Combined Statements of Operations of Unconsolidated Properties For the Three Months Ended March 31 19 Top 10 Retail Tenants by Gross Leaseable Area 20 Top 20 Tenants by Annualized Base Rent 21 Lease Expiration Table – Combined Retail and Commercial Portfolio 22 Lease Expiration Table – Retail Anchor Tenants 23 Lease Expiration Table – Retail Shops 24 Lease Expiration Table – Commercial Tenants 25 Summary Retail Portfolio Statistics 26 Summary Commercial Portfolio Statistics 27 Development Pipeline 28 Geographic Diversification – Operating Portfolio 29 Operating Retail Properties 31 Operating Commercial Properties 32 Retail Operating Portfolio – Tenant Breakdown 33 2005 Acquisitions of Operating Properties p. 2 Kite Realty Group Supplemental Financial and Operating Statistics – 3/31/05 C ORPORATE P ROFILE General Description Kite Realty Group Trust commenced operations in August 2004 as the successor to certain businesses of Kite Property Group, a nationally recognized real estate owner and developer. We are a full service, vertically integrated real estate company focused primarily on the development, construction, acquisition, ownership and operation of high quality neighborhood and community shopping centers in selected growth markets in the United States. As of March 31, 2005, we owned interests in 39 operating properties totaling approximately 5.5 million square feet and interests in 10 properties under development representing 1.7 million square feet. We are organized as a real estate investment trust ("REIT") for federal income tax purposes. Our strategy is to maximize the cash flow of our operating properties, successfully complete the construction and lease-up of our development portfolio and identify additional growth opportunities in the form of new developments and acquisitions. New investments are focused in the shopping center sector, although we may selectively pursue commercial development or acquisition opportunities in markets where we currently operate and where we believe we can leverage the existing infrastructure and relationships to generate attractive risk adjusted returns. Company Highlights (as of March 31, 2005) Operating Retail Properties 33 Operating Commercial Properties 6 Total Properties Under Development 10 States 9 Total GLA/NRA (operating) 5,469,090 Owned GLA/NRA (operating) 4,274,360 Percentage of Owned GLA Leased - Retail 93.8% Percentage of Owned NRA Leased – Commercial 97.7% Total Employees 77 Stock Listing New York Stock Exchange symbol: KRG p. 3 Kite Realty Group Supplemental Financial and Operating Statistics – 3/31/05 C ONTACT I NFORMATION Corporate Office 30 South Meridian Street, Suite 1100 Indianapolis, IN 46204 1-888-577-5600 317-577-5600 www.kiterealty.com Investor Relations Contacts: Analyst Coverage: Daniel R. Sink, Chief Financial Officer Goldman, Sachs & Co. Kite Realty Group Trust Mr. Carey Callaghan 30 South Meridian Street, Suite 1100 (212) 902-4351 Indianapolis, IN 46204 [email protected] (317) 577-5609 [email protected] KeyBanc Capital Markets Mr. Richard C. Moore II, CFA The Ruth Group (216) 443-2815 Stephanie Carrington [email protected] (646) 536-7017 Jason Rando Lehman Brothers (646) 536-7025 Mr. David Harris (212) 526-1790 Transfer Agent: [email protected] LaSalle Bank, National Association Raymond James 135 South LaSalle Street Mr. Paul Puryear Chicago, IL 60603-3499 (727) 567-2253 (312) 904-2000 [email protected] Stock Specialist: Wachovia Securities Mr. Jeffrey J. Donnelly, CFA Van der Moolen Specialists USA, LLC (617) 603-4262 45 Broadway [email protected] 32nd Floor New York, NY 10006 (646) 576-2707 p. 4 Kite Realty Group Supplemental Financial and Operating Statistics – 3/31/05 I MPORTANT N OTES Interim Information This Quarterly Financial Supplement contains historical information of Kite Realty Group Trust (the “Company”) and Kite Property Group (the “Predecessor”) and is intended to supplement the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2005, which should be read in conjunction with this package. The supplemental information is unaudited, although it reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of operating results for the interim periods. Forward-Looking Statements This supplemental information package contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to: • national and local economic, business, real estate and other market conditions; • the ability of tenants to pay rent; • the competitive environment in which the Company operates; • financing risks; • property management risks; • the level and volatility of interest rates; • financial stability of tenants; • the Company’s ability to maintain its status as a REIT for federal income tax purposes; • acquisition, disposition, development and joint venture risks; • potential environmental and other liabilities; • other factors affecting the real estate industry generally; and • other risks identified in reports the Company files with the Securities and Exchange Commission (the “SEC”) or in other documents that it publicly disseminates. The Company undertakes no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Funds From Operations Funds from Operations (“FFO”) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. We calculate FFO in accordance with the best practices described in the April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts (NAREIT), which we refer to as the White Paper. The White Paper defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Given the nature of our business as a real estate owner and operator, we believe that FFO is helpful to investors in measuring our operational performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance such as gains (or losses) from sales of property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. FFO should not be considered as an alternative to net income (determined in accordance with generally accepted accounting principles (“GAAP”)) as an indicator of our financial performance, is not an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, and is not indicative of funds available to fund our cash needs, including our ability to make distributions. Our computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. Net Operating Income Net operating income (“NOI”) is provided here as a supplemental measure of operating performance. NOI is defined as property revenues less property operating expenses, excluding depreciation and amortization, interest expense and other items. We believe that this presentation of NOI is helpful to investors as a measure of its operational performance because it is widely used in the real estate industry to measure the performance of real estate assets without regard to various items included in net imcome that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods and book value of assets. We also believe NOI helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of our basis in our assets from our operating results. NOI should not, however, be considered as an alternative to net income (calculated in accordance with GAAP) as an indicator of